Goldman Sachs raises Apple stock price target to $240 based on strength of imminent 'iPhon...

Posted:
in AAPL Investors
Analysts at Goldman Sachs are taking an "opportunity to eat our hat" on earlier caution about Apple's financial prospects, based on not just what the iPhone X has done, but what they expect the iPhones expected to be announced at the "Gather round" event will do.

2018 iPhone mockups


A new analyst note from Goldman Sachs seen by AppleInsider on Friday made it clear that the firm is eying the price points of the new iPhones Apple is expected to announce on Sept. 12, as well as those phones' features and the price point of the new AppleCare+ plans that are also expected.

The note, authored by Goldman's Rod Hall, Ashwin Kesireddy, Bala R. Reddy and RK Raghunathan Kamesh, also raises the firm's price target on Apple to $240, while pulling back on the caution they've shown in recent months.

"We also take this opportunity to eat our hat somewhat on our cautious stance this Summer and raise our 12-month price target to $240," the analyst write. "We had expected worse iPhone X demand and some pullback in the stock -- clearly neither of these two things happened. Given the limited upside from here to our new price target we stick with a Neutral rating but Apple is once again proving itself tough to bet against."

Goldman sees Apple unveiling the three-iPhone lineup that is all but confirmed, of a 6.1-inch iPhone 9 (LCD screen), a 5.8-inch iPhone Xs with OLED screen, and a 6.5-inch "iPhone Xs Plus" also with OLED. They expect the 64GB LCD version to be priced at $849, which is higher than the consensus, and argue that "a $699 price point on the iPhone 9 makes little sense for Apple and would drive a FY19 EPS outcome that is below consensus." This puts Goldman's ASP for FY19 higher than the consensus.

In addition, the analysts expect Apple to announce a pair of new AppleCare+ Plans, for the iPhone 9 and the Xs+, which they expect will cost $179 and $219.

"We expect overall mix of AppleCare+ to skew towards higher price plans in CY19 and help Service revenues," added the analysts. "In our central case, we are forecasting CY19 AppleCare+ revenue from iPhones to be ~$7.7 billion, implying 12.7 percent Y/Y growth."

Goldman Sachs, one of the leading firms on Wall Street, initiated regular coverage of Apple's stock in February.
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Comments

  • Reply 1 of 28
    nunzynunzy Posts: 662member
    A second super cycle in row!
  • Reply 2 of 28
    wood1208wood1208 Posts: 1,642member
    Don't have to be GS to predict that. Most Apple product fans and users said that a while back.
    watto_cobra
  • Reply 3 of 28
    tzeshantzeshan Posts: 1,801member
    There will be a rush to buy new iPhones. Because if President raise tariffs on all Chinese goods, iPhone price will jump 25%.  This is a lot of money to some people. 
  • Reply 4 of 28
    They had to do something to stop the loss of clients
    watto_cobra
  • Reply 5 of 28
    We also take this opportunity to eat our hat somewhat on our cautious stance this Summer”

    Yep that sounds like the kind of firm I’d happily hand my retirement savings over to...
  • Reply 6 of 28
    tzeshan said:
    There will be a rush to buy new iPhones. Because if President raise tariffs on all Chinese goods, iPhone price will jump 25%.  This is a lot of money to some people. 
    A 25% increase is a lot of money to a lot of people. $250.00 additional on a $1000.00 phone is a lot of money relevant to the total price. It’s not about can I afford and extra $250 at that point it’s about is it worth a $250 premium to buy Apple’s newest device. 
    watto_cobra
  • Reply 7 of 28
    Tariffs will kill any expected boost in iPhone sales. Perfect timing for Apple shareholders, as usual. It appears to Wall Street, Apple is going to become the biggest target and sustain the most losses of any tech company. Just fantastic.
    edited September 7
  • Reply 8 of 28
    jcs2305 said:
    tzeshan said:
    There will be a rush to buy new iPhones. Because if President raise tariffs on all Chinese goods, iPhone price will jump 25%.  This is a lot of money to some people. 
    A 25% increase is a lot of money to a lot of people. $250.00 additional on a $1000.00 phone is a lot of money relevant to the total price. It’s not about can I afford and extra $250 at that point it’s about is it worth a $250 premium to buy Apple’s newest device. 
    Apple's products are largely immune to price sensitivity. Although it looks like a lot, I bet Apple's sales would be pretty consistent. Also, the tariffs are just part of a negotiation process. No one should assume anything at this early stage. China has a hell of a lot more to lose than the US if this happens.
  • Reply 9 of 28
    tzeshantzeshan Posts: 1,801member
    jcs2305 said:
    tzeshan said:
    There will be a rush to buy new iPhones. Because if President raise tariffs on all Chinese goods, iPhone price will jump 25%.  This is a lot of money to some people. 
    A 25% increase is a lot of money to a lot of people. $250.00 additional on a $1000.00 phone is a lot of money relevant to the total price. It’s not about can I afford and extra $250 at that point it’s about is it worth a $250 premium to buy Apple’s newest device. 
    Apple's products are largely immune to price sensitivity. Although it looks like a lot, I bet Apple's sales would be pretty consistent. Also, the tariffs are just part of a negotiation process. No one should assume anything at this early stage. China has a hell of a lot more to lose than the US if this happens.
    US government counts all the profits Apple make as part of the deficits to China. Isn't that a very stupid government? 
  • Reply 10 of 28
    tzeshantzeshan Posts: 1,801member
    Correction. I should say a very stupid accounting instead of a very stupid government. 
  • Reply 11 of 28
    wood1208wood1208 Posts: 1,642member
    May be it's time for Apple and others to move manufacturing out of China. No products from China,no tariff,no 25% hike.
  • Reply 12 of 28
    nunzynunzy Posts: 662member
    jcs2305 said:
    tzeshan said:
    There will be a rush to buy new iPhones. Because if President raise tariffs on all Chinese goods, iPhone price will jump 25%.  This is a lot of money to some people. 
    A 25% increase is a lot of money to a lot of people. $250.00 additional on a $1000.00 phone is a lot of money relevant to the total price. It’s not about can I afford and extra $250 at that point it’s about is it worth a $250 premium to buy Apple’s newest device. 
    Apple's products are largely immune to price sensitivity. Although it looks like a lot, I bet Apple's sales would be pretty consistent. Also, the tariffs are just part of a negotiation process. No one should assume anything at this early stage. China has a hell of a lot more to lose than the US if this happens.
    People who can't afford Apple don't deserve to own their products.
  • Reply 13 of 28
    tzeshantzeshan Posts: 1,801member
    wood1208 said:
    May be it's time for Apple and others to move manufacturing out of China. No products from China,no tariff,no 25% hike.
    Then Apple may lose China market. 
  • Reply 14 of 28
    volcanvolcan Posts: 1,737member
    It is nice that Ivanka gave up her China manufacturing. Trump needs to do the same. His policies are full of hipocricy such as his immigration of workers to his resorts while he imports many workers. I’m fine with protecting our borders and trade policies but he needs to walk the walk and talk the talk before he is believable.

    And please stop lying about everyting. That would go a long way to making him more acceptable although I will never vote for him. Never have never will.

    You can choose whoever you want but he is not my choice.
  • Reply 15 of 28
    tzeshan said:
    jcs2305 said:
    tzeshan said:
    There will be a rush to buy new iPhones. Because if President raise tariffs on all Chinese goods, iPhone price will jump 25%.  This is a lot of money to some people. 
    A 25% increase is a lot of money to a lot of people. $250.00 additional on a $1000.00 phone is a lot of money relevant to the total price. It’s not about can I afford and extra $250 at that point it’s about is it worth a $250 premium to buy Apple’s newest device. 
    Apple's products are largely immune to price sensitivity. Although it looks like a lot, I bet Apple's sales would be pretty consistent. Also, the tariffs are just part of a negotiation process. No one should assume anything at this early stage. China has a hell of a lot more to lose than the US if this happens.
    US government counts all the profits Apple make as part of the deficits to China. Isn't that a very stupid government? 
    No, it does not.

    Cite, please. Otherwise, delete your post. 
  • Reply 16 of 28
    tzeshan said:
    wood1208 said:
    May be it's time for Apple and others to move manufacturing out of China. No products from China,no tariff,no 25% hike.
    Then Apple may lose China market. 
    Why? Do the Chinese only buy products made in China? If yes, then maybe the Trump administration has a point. 

    If not, what do you mean?
    edited September 8
  • Reply 17 of 28
    wood1208wood1208 Posts: 1,642member
    volcan said:
    It is nice that Ivanka gave up her China manufacturing. Trump needs to do the same. His policies are full of hipocricy such as his immigration of workers to his resorts while he imports many workers. I’m fine with protecting our borders and trade policies but he needs to walk the walk and talk the talk before he is believable.

    And please stop lying about everyting. That would go a long way to making him more acceptable although I will never vote for him. Never have never will.

    You can choose whoever you want but he is not my choice.
    Besides number of controversies about Mr. Trump, but he is one president with guts to stand against China who for decades directly or indirectly stealing intellectual properties from rest of world, copying others products and sell back to rest of world is like normal thing in China. Unfortunately, Government whole heartily supports it. So, i don't like him but admire his stand. He made Mexico to make new deal. Same will happen with Canada, EU and than China. So, instead of whatever your opinion/belief, I like to support him because he is the leader of the country I live in.
    2old4funSpamSandwich
  • Reply 18 of 28
    jcs2305 said:
    tzeshan said:
    There will be a rush to buy new iPhones. Because if President raise tariffs on all Chinese goods, iPhone price will jump 25%.  This is a lot of money to some people. 
    A 25% increase is a lot of money to a lot of people. $250.00 additional on a $1000.00 phone is a lot of money relevant to the total price. It’s not about can I afford and extra $250 at that point it’s about is it worth a $250 premium to buy Apple’s newest device. 
    Apple's products are largely immune to price sensitivity. Although it looks like a lot, I bet Apple's sales would be pretty consistent. Also, the tariffs are just part of a negotiation process. No one should assume anything at this early stage. China has a hell of a lot more to lose than the US if this happens.
    No assumptions made for sure. I was responding to tzeshan who made the original comment of raising tariffs on all chinese good and the comment that $250.00 is a lot of money to some people. 

    I also agree that China has a ton more to lose if these tarrifs go this way and American slow down with the products they purchase whether it be Apple or another company’s products.  I personally don’t like this whole tariff game and wish DJT would just back off. That however is a whole other conversation.  
  • Reply 19 of 28

    nunzy said:
    jcs2305 said:
    tzeshan said:
    There will be a rush to buy new iPhones. Because if President raise tariffs on all Chinese goods, iPhone price will jump 25%.  This is a lot of money to some people. 
    A 25% increase is a lot of money to a lot of people. $250.00 additional on a $1000.00 phone is a lot of money relevant to the total price. It’s not about can I afford and extra $250 at that point it’s about is it worth a $250 premium to buy Apple’s newest device. 
    Apple's products are largely immune to price sensitivity. Although it looks like a lot, I bet Apple's sales would be pretty consistent. Also, the tariffs are just part of a negotiation process. No one should assume anything at this early stage. China has a hell of a lot more to lose than the US if this happens.
    People who can't afford Apple don't deserve to own their products.
    People who are mindless cheerleading trolls shouldn’t be allowed to post ridiculous comments day after day. Yet here you are...
    fastasleep
  • Reply 20 of 28
    wood1208 said:
    volcan said:
    It is nice that Ivanka gave up her China manufacturing. Trump needs to do the same. His policies are full of hipocricy such as his immigration of workers to his resorts while he imports many workers. I’m fine with protecting our borders and trade policies but he needs to walk the walk and talk the talk before he is believable.

    And please stop lying about everyting. That would go a long way to making him more acceptable although I will never vote for him. Never have never will.

    You can choose whoever you want but he is not my choice.
    Besides number of controversies about Mr. Trump, but he is one president with guts to stand against China who for decades directly or indirectly stealing intellectual properties from rest of world, copying others products and sell back to rest of world is like normal thing in China. Unfortunately, Government whole heartily supports it. So, i don't like him but admire his stand. He made Mexico to make new deal. Same will happen with Canada, EU and than China. So, instead of whatever your opinion/belief, I like to support him because he is the leader of the country I live in.
    I agree with you.  Through the venue of politics Trump is showing the country how big business works.  U.S vs China, Apple vs Qualcomm - similar operation, one on the political level between countries and one on the commercial level between companies.  The theme is - "I don't like how our business is going and I want changes."  This happens to different degrees with all business.  But on the political level it has always been done behind closed doors so that the public didn't know what was happening.  Trump has changed that and brought it into the open and that scares a lot of people.
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